Blog post by Empower Wealth

(LIVE) RBA Aug 2026 | Hold Today, Hike Tomorrow?

The Reserve Bank left the cash rate unchanged at 4.35% at its August meeting, in line with what all four major banks had forecast.

The decision itself wasn’t the surprise. What matters more is what came with it — and on that front, the Board was considerably more direct than a routine hold might suggest.

The decision was unanimous

There was no split on the Board this time.

Every member backed the hold, while the statement made it clear that the focus remains squarely on inflation and the risk of higher inflation becoming embedded in expectations.

And there was one line in particular worth paying attention to.

The Board made clear it remains prepared to do what is necessary to bring inflation sustainably back to target — including increasing the cash rate further if upside risks materialise.

That is not the language of a central bank that considers the job finished.

It’s a Board that has paused while explicitly reserving the right to move again.

As Evan Lucas put it during our live analysis, the upcoming quarterly inflation data will now be particularly important. Two more increases may look less likely, but one more certainly hasn’t been ruled out.

What else stood out in the RBA statement?

Three things caught our attention.

Geopolitics got unusual prominence

The Board pointed to the conflict in the Middle East and its impact on global oil supply as a source of inflation uncertainty. For households, businesses and policymakers alike, energy prices remain one of the big variables that can quickly change the inflation outlook.

Financial conditions have tightened

The RBA acknowledged that this year’s three rate increases are already flowing through financial markets, with money market interest rates, government bond yields and the Australian dollar all moving higher. In other words, some of the tightening the RBA wanted to see is happening — and the full impact of those earlier increases may still be working its way through the economy.

The RBA talked about housing

This was particularly interesting.

The statement noted that momentum in the housing market has shifted, with prices falling in some capital cities and new housing lending declining notably. Evan highlighted during the live session that the RBA doesn’t often spend much time discussing the housing market directly. His read was that the Board is watching what falling property wealth could mean for consumer behaviour: when households feel less wealthy, they tend to become more cautious about spending. And from the RBA’s perspective, weaker demand is part of what ultimately helps bring inflation back towards target.

Put plainly, Ben and Evan’s assessment was that the Board appears prepared to tolerate a period of weaker, below-trend growth if that’s what is required to get inflation under control.

Watch the full session

Ben Kingsley and Evan Lucas covered the announcement live, including a detailed breakdown of:

Why inflation remains the RBA’s biggest concern
What’s happening with household spending and the cost of living
The latest employment and wage data
Falling consumer and business confidence
What the RBA’s comments on housing could mean
The outlook for the US, China and Europe
Why another Australian rate rise is still possible

Watch the replay →

And mark 29 September in your calendar — that’s when Ben and Evan will return for our next Economic & RBA Update.

Is your loan still working for you?

An unchanged cash rate doesn’t automatically mean your mortgage is still competitive.

Lenders adjust their pricing independently of the RBA, and in an environment where rates may yet move higher, the structure of your lending can matter just as much as the headline rate.

Our Mortgage Broking team can review your current loan, compare it against what’s available, and help you understand whether there may be an opportunity to negotiate with your existing lender, refinance or restructure.

The review is free, and there’s no obligation to make a change.

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